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Wednesday, April 4, 2018

Goose Island's Awkward Stab at Relevance

Goose Island Brewing was established in 1988. It was a proud craft brand for more than two decades, respected in its hometown of Chicago and beyond. In 2011, it was consumed by Anheuser-Busch, a buyout that wasn't exactly welcomed by craft beer fans. Of course, there were many more buyouts to come.

For several years, Goose Island rode the wave of craft popularity. Heavily discounted kegs of Goose IPA sucked up tap handles in bars everywhere. Never mind that the great bulk of that beer was and is brewed in AB factory breweries or partner breweries. Goose was hot.

It's all gone sour, of course, Goose brands have been taking a dive in grocery and retail stores around the country. The only brand in growth mode is Goose IPA, up 29 percent last year. That number, mainly the result of discounting, is a fraction of the rate at which the IPA was growing several years ago.

Goose Island is caught in the same downward spiral we're seeing with many of the regional craft breweries. These folks are struggling, in good part because smaller, local brewers are better at innovation and producing what contemporary beer fans want. You need to be creative and nimble. Large breweries aren't.

Big beer failed to see the shift in tastes coming. When they started buying up craft breweries, they expected to dominate the marketplace via mass production and distribution of formerly independent brands. They've actually had some success with that. AB's High End portfolio has done well, largely due to the power of distribution and discounting.

But the number of small local breweries cropping up all over the map is a stick in big beer's spokes. The little guys have momentum. They're closely connected to their markets and many of them specialize in small batch, experimental beers that tap the hearts, minds and taste buds of local and regional consumers. This is the state of the industry, like it or not.

Adjusting to the changed reality is proving a steep challenge for big beer, which includes regional craft and the Baby Buds. Even though Goose Island has well-known specialty brands, its national status renders those brands less relevant to consumers. Its mainstream beers, widely considered to be pedestrian and out of touch, face declining appeal.

Addressing that challenge isn't as simple as installing a small batch brewery and making small batch beers. That's the easy part. The larger challenge is winning back status and credibility. That's tough. And breweries the size of Goose Island aren't that nimble, despite being bankrolled by their masters in St. Louis, Belgium or wherever.

Nonetheless, Goose Island hopes to remake its image. First thing on the agenda was a canning machine. You may have noticed that innovation beers often tend to come in 16-ounce cans these days. Goose noticed. It bought a tiny canning line and hopes to exploit the can fad by rolling out small batch, experimental beers in its home market. Blanks with label wraps, anyone?

There's also help on the way for Goose Island's specialty beers, including Matilda and Sofie, which are underperforming as consumers chase local options. They'll likely revamp the packaging with new bottles and labels. Because when beers aren't selling, it's almost always the packaging. Who was it that warned us about breweries that sell packaging, not beer? Hmmm.

It's worth mentioning that returning to local roots is a popular theme in big craft at the moment. It's popular because it's about the only option they have. Consider the case of Widmer, still waiting for a fat AB buyout check. It closed the Gasthaus Pub suddenly late last fall and promptly opened a taphouse featuring experimental, small batch beers. Shocking, eh?

Like Goose Island, Widmer has watched its brands collapse across a wide range of geography. Both would like craft fans to forget their national aspirations and connections to big beer. Both want to be seen as being all about experimentation and innovation. Both see building credibility at home as a means of lifting their struggling mainstream portfolios everywhere.

But it's hard to imagine Goose Island's mainstream beers rebounding nationally. Or Widmer's. The sheer number of small, local breweries has altered the landscape pretty much for good. Efforts to reclaim and build on local relevance look mostly like awkward stabs in the dark.

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